Field's no more

The Marshall Field's name, as identified with Chicago as its lakefront and its skyline, is being erased in favor of a Manhattan moniker--Macy's.

This move kills off a 153-year-old brand that survived the Chicago Fire but now succumbs to bottom-line concerns of its new owner, Cincinnati-based Federated Department Stores Inc.

Rapid consolidation and competition from both high-end stores such as Nordstrom and discounters such as Target and Wal-Mart have conspired for years against regional chains like Marshall Field's, leaving them with neither the buying clout nor the advertising power to compete.

With the 62 Marshall Field's stores becoming Macy's, Federated will complete the national footprint it has long sought to make the chain, known as the backdrop in the holiday film "Miracle on 34th Street," a powerhouse.

That reasoning was little comfort for Chicago shoppers.

The announcement aroused widespread anger across Chicago, where people often tell each other to "meet under the Field's clock" on State Street.

"Macy's should stay in New York and Field's should stay in Chicago," said 87-year-old Helena Beadal of Chicago, who has fond memories of shopping on State Street and still meets a friend there every Tuesday. "I'm thinking of closing my [charge] account."

Macy's doesn't belong on State Street, added 21-year-old Olugbemisola Oke, a sales associate at the store. "People really come here for the name," she said. "It's a Chicago icon."

By the 2006 holiday shopping season, Chicagoans who flock to the ornate displays at the flagship store on State Street will be looking into the windows of a Macy's.

Federated Chief Executive Terry Lundgren defended the decision. Citing internal market research, he said "two-thirds of those surveyed in the Chicago market felt neutral to positive--largely neutral--about the name change from Marshall Field's to Macy's."

The reaction was anything but neutral after the name change was announced. An unscientific online Chicago Tribune poll was indicative of the emotional response: More than 96 percent said they would be less like to shop at Field's if the name is changed to Macy's. More than 14,000 people had voted as of 7 p.m. Tuesday.

Chicago Mayor Richard Daley took a philosophical view of the loss of the Field's name, announced as the State Street store plays host to numerous Fashion Week events.

"Retailing has changed and lifestyles have changed and business has changed, but we should never be afraid of change," he said.

Indeed, the fate of Field's name is a familiar story in this time of retail industry consolidation. Since March, longtime regional names have fallen in markets from Miami to Seattle as Federated fashions Macy's into a national nameplate that can be advertised coast to coast. Macy's brand-building got a boost last month when Federated completed its acquisition of Field's parent, May Department Stores Co., in a deal to create a $30 billion department store chain.

`Very challenging business'

In explaining the decision to shelve the Field's name, Lundgren said that regional department stores are "in a very challenging business," getting nibbled at by bigger national players for apparel basics and by upscale chains for luxury goods.

"That's why you don't see them anymore," he said of regional chains. "Marshall Field's is a great name and a fabulous business in many ways. But it's not doing very well, and it hasn't been for years."

Lundgren declined to comment on a statement by a Field's executive earlier this year that the $2.5 billion chain had a sales upswing in 2004, its first since 1999. Figures published earlier this year by May Department Stores also showed that Field's sales rose in 2004.

If there was a silver lining in the announcement, it came during a meeting Lundgren had with Daley in his City Hall office Tuesday morning.

There Lundgren said Federated would consider returning the production of Frango mints to Chicago. And although Federated announced plans to cut more than 6,000 jobs in such markets as Los Angeles, St. Louis and Boston, no layoffs are planned for Chicago.

That pleased Daley, who early on "was not very thrilled" about the possibility of losing Field's identity, a spokeswoman for the mayor said.

But the promise of no layoffs and the possibility of returning Frango manufacturing to Chicago were "a huge part of [becoming] amenable" to the change in nameplates, she said.

Several retail consultants think Federated is being short-sighted by changing the name.

"Chicagoans and folks in the central United States tend to be more brand loyal," said Burt Flickinger, managing director for Strategic Resource Group in New York. "While Field's was a broken business, it was not unfixable. Federated has taken a broken business and made it a much more broken business."

Another retail consultant said Field's could be fashioned into an upscale brand.

"Retailing has been skewed to the low end and the high end. Marshall Field's would be a powerful high-end brand. Why would you bring it down to the mushy middle?" asked Al Ries, author of the "The 22 Immutable Laws of Branding."

"This is particularly bad," he said. "I'd rather have a name that no one has heard of with potential rather than a name like Macy's that everyone has heard of but has no potential. People know about it, but it will never be perceived as a high-end brand."

Craig Johnson, president of Connecticut consulting firm Customer Growth Partners, called it "the biggest consumer marketing mistake since the geniuses in Atlanta came up with New Coke in the 1980s."

"In fact, when Terry Lundgren said they had `carefully researched consumer preferences,' that's what Coke management said at the time," Johnson said.

Big corporate savings

Former Field's President Dan Skoda regrets that the name of his old stomping ground will cease to exist, but he understands the rationale.

"They'll save a lot of money by putting Macy's on everything from TV and newspaper ads to even paychecks," Skoda said. "That's one reason Target and Wal-Mart are so economical."

Indeed, there can be a disconnect between how shoppers say they'll mourn the loss of their hometown chains and whether their shopping habits change as a result of a new moniker.

Last March, Federated converted five of its regional nameplates--Rich's, Lazarus, Goldsmith's, Burdines and Bon Marche--to Macy's amid an outcry in some of the markets.

But since then, Federated's monthly same-store sales--sales at stores open at least a year--have increased in all but one month.

While Lundgren said Federated is still studying the performance of Field's business, from its designer shop to its store-within-a-store concept on State Street, Field's shoppers most certainly will see changes above and beyond the Macy's name.

"The merchandise assortment is definitely going to be tweaked," he said. "It has to be, because that's what customers respond to. They've got to respond better than they've been responding for the last several years."

Lundgren said it was too late to restore Field's to its former glory under its long-standing name because it's hard to change the opinions of those who no longer shop there.

Of the coming changes to the historic State Street flagship, Lundgren said, "I just know it needs to do better."